Reduce Friendly Fraud


Top Tips for Reducing Friendly Fraud

Businesses are constantly threatened by various risks, especially merchants that accept card-not-present transactions. One relatively new risk is friendly fraud. While not as well-established as other forms of criminal activity, friendly fraud is a costly threat that can inflict significant long-term damage for any business that doesn’t take the necessary steps to reduce friendly fraud.

What is Friendly Fraud?

Friendly fraud is often called chargeback fraud because consumers use the chargeback process to steal from the merchant. Rather than secure a traditional refund from the merchant, the credit card holder will contact the bank for a chargeback.

Many customers simply don’t understand the difference between a chargeback and a refund. They get their money back; who cares if the bank was responsible for reimbursing the credit card account instead of the merchant?!

As you are well aware, there is a huge difference between a chargeback and a refund! Those consumers who view the bank as a customer service middleman, someone who can make the refund process simple and painless, are unknowingly committing cyber shoplifting.

On the other hand, there are plenty of consumers who are cognizant of their actions. They intentionally commit friendly fraud in an effort to get something for free.

Regardless of the intentions behind the act, these friendly fraudsters must be stopped. Merchants must make an effort to reduce chargeback fraud before it’s too late.

Best Ways to Reduce Chargeback Fraud

Our friendly fraud eBook contains more than 30 chargeback prevention tips. Download it now for a full listing of all the best ways to reduce friendly fraud chargebacks.

Let’s look at a few ways to reduce friendly fraud and recoup profits from illegitimate chargebacks.

Use Available Tools

There are several tools that can help deter friendly fraudsters. Better yet, these tools can help strengthen your chargeback representment case if cardholders do file illegitimate chargebacks.

Request card security codes. These can effectively dispute chargebacks that result from supposedly unauthorized transactions. Card security codes cannot be stored by merchants, meaning criminals can’t hack the information from somewhere else. Therefore, when the true codes are entered, you can assume the cards are in the shoppers’ possession.

Don’t Let Chargeback Fraud Force You out of Business.

Let Chargebacks911 show you how to retain customers, recover revenue lost to fraud, and reduce your number of chargebacks.


Use 3-D Secure. Shoppers are required to enter a predetermined passcode in the midst of the checkout process. Again, only the true cardholder should have access to this information.

Check with the Address Verification System. Verifying the customer’s address is a great way to reduce friendly fraud. A positive AVS match can refute a cardholder’s claim that the purchase wasn’t authorized (a true criminal probably wouldn’t know the account billing address).

Provide Customer TLC

The more tender loving care your business can provide to customers, the better your business will be in the long run.

The driving force behind friendly fraud is the thought that there are no repercussions–but that just isn't the case.

Monica Eaton-Cardone

Co-Founder and COO

Build relationships with your customers. If customers understand their purchases and have confidence that you’ll help them find a resolution to their problems, they won’t seek a friendly fraud chargeback. Loyal and satisfied customers will come to you for a refund instead.

Communicate regularly with customers. Send newsletters or other communications that keep consumers in the loop. Help customers become familiar with your brand, products or services, policies, and channels of communication.

Use Electronic Signature Pages

Merchants should consider having customers sign an electronic signature page when completing a purchase online. First, this helps the customer understand what they are buying and the terms they’re agreeing to. Second, it provides you with essential documentation to dispute future chargebacks.

You can ask the customer to actually add their signature during the checkout process or simply ask them to tick an acceptance box.

Keep Great Customer Records and Account Histories

While it might be difficult to reduce friendly fraud chargebacks from happening, you can certainly prevent friendly fraud profit losses. Keeping detailed transaction records will help make a representment case more effective and thereby recoup more profits.

Record the customer’s phone number, IP address, electronic signature page, delivery tracking information and detailed notes of any customer correspondences. This simple act can save your business a lot of headaches and profit losses. Better safe than sorry.

Get Professional Help

Chargeback fraud is a rapidly growing problem. Merchants are losing far more profits to friendly fraud than criminal fraud; friendly fraud cost merchants nearly $12 billion while criminal fraud lead to less than $3 billion in losses.

Ecommerce popularity will continue to grow, but fraud techniques will evolve just as quickly. If you don’t take a proactive approach to chargeback prevention and disputes, you’re endangering your business’s long-term stability.

Start by downloading our free friendly fraud eBook. We share tons of innovative and unique tactics to reduce friendly fraud, tips you won’t find anywhere else. Plus, we expose what’s really happening in the payment industry, giving you a no-holds-barred look at what is causing this chargeback fraud.

Acquiring banks are quick to terminate the merchant account for any business that experiences excessive chargebacks. Don’t let illegitimate chargebacks force you out of business. Reduce chargeback fraud, maintain your credibility, and recoup profits that are rightfully yours.

Prevent Chargebacks.

Fight Fraud.

Recover Revenue.

3155    Friendly Fraud    

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